Are ASICs as profitable as specialized companies claim?

If you are interested in mining, this article should attract your attention, because not everything is simple in the world of cryptocurrencies, especially in prolific activities as mining. This article is not intended to ruin the mining reputation, quite the contrary, it only aims to raise awareness among beginners wishing to contribute to the proper functioning of the blockchain, to avoid the most obvious traps. Although we have no proof to justify our comments, you will see that they are still interesting to read.

As you know, the very essence of the blockchain is the decentralization of transactions, in other words, the total removal of trusted third parties. This vision imagined by the creators of the blockchain was quickly diverted by 2 things having a strong impact in the world of the blockchain as we know it today. Indeed, technological progress and the democratization of the blockchain quickly led to the emergence of Pools and ASICs, thus contributing to the progressive centralization of the blockchain and returning power to the highest bidder, to the detriment of the people. Not so sure that Mr Nakamoto would have wanted this! In addition, the behaviour of companies specialising in blockchain and mining quickly contributed to this centralisation and quickly took advantage of it to benefit from their piece of the cake.

Here are the reasons that lead us to express our negativity in relation to ASICs:

You think you’re mining with new equipment, you’re wrong!

Believe it or not, but the ASIC manufacturer will undermine with the equipment you buy later. They make their money grow with the miners until the protocol process is updated. When this is the case, they will put their miner on sale in order to develop other more efficient mining tools who will in turn allow them to mine ahead of others particular miners. This is one of the reasons why the mining difficulty is increasing sharply. As a result, you will never be able to make your miner profitable unless the price of the cryptocurrency explodes.

Buying miners on the second-hand market, bad idea!

When you have a limited budget, you can go on the second-hand market. You will find the right shoe for you on rare occasions. Let me explain, we often talk about pre-selling minors. In the world of cryptocurrencies, this means that you will have to pay several months in advance. By the time you receive the machine, the mining difficulty will have increased significantly thanks to millions of much more efficient machines that are already running at full capacity.

In the second-hand market, there will be many ads to sell you the machines and deliver them much faster than companies. However, the price will be much higher than the initial price of a new product. The impact on profitability will be even worse, because you will only lose money by running the machine, unless you can find a buyer to get rid of such a financial abyss. Morality of the story: Do not buy second-hand ASIC minors under any circumstances!

The later you own your minors, the more likely you are to take the risk of having an obsolete machine

Indeed, most companies manufacture ASIC miners for the same cryptocurrency in several power versions. If you buy a miner several months after its release, you run the risk of buying a miner a few weeks before the release of another much more powerful model that will give your equipment the status of “outdated”.

Assuming that specific mining companies and mining farms are several steps ahead of particular miners, it goes without saying that you will have to invest constantly each time a new ASIC machine is added to the catalogue of specialized dealers. Indeed, the mining difficulty will increase considerably. As a result, you will quickly need to acquire new materials. Knowing that it is only possible to make the machine profitable after on average, one year. In short, this gold rush may not be profitable at all.

The CIA’s opinion

When a cryptocurrency is mined by an ASIC, Not only does it have no interest in being mined through GPUs, but its decentralization is also threatened. Most miners decide to mine other cryptos and this is the best thing we can do if we don’t want to lose money, in addition to contributing to the good development of the Blockchain. Even if we do not recommend any financial investment, we remind you that the direct purchase of cryptocurrencies remains the easiest and least risky way to invest in this area.

Passionate about digital technologies and thanks to my experiences as advisor in the crypto sector, my goal is to popularize this fascinating but nevertheless vague world to the general public as simply as possible